April 12 Forest Oil Corp said
Schlumberger Ltd, the oilfield services sector leader,
will pick up a 50 percent working interest in the oil and gas
producer's Eagle Ford shale acreage by paying $90 million
towards future drilling costs.
Debt-heavy Forest oil has raised $600 million from asset
disposals since last July to improve liquidity. The company had
$1.86 billion in debt and $1.1 million in cash and equivalents
as of Dec. 31, according to Thomson Reuters data.
Forest, whose cash flows have decreased due to weak natural
gas prices, has turned attention to liquids output in the
Texas-Oklahoma Panhandle, East Texas and Eagle Ford Shale in
Forest, which will operate the Eagle Ford drilling program,
expects to spend the $90 million by the end of 2014, it said in
a statement on Friday.
Forest expects its share of capital expenditure in the
development plan to be about $125 million in 2013, and $220
million in 2014.
Beyond that, Forest and Schlumberger will share future
drilling costs equally.
The company plans to increase drilling to four rigs by the
end of the third quarter, from one to two rigs currently. Sales
volumes in 2014 are expected to scale up to 6,500 boe/d (barrels
of oil equivalent per day), from 1,600 boe/d in 2012.
As part of the agreement, Schlumberger will provide
drilling, completion and lifting technologies and reservoir
management technologies, besides other services.
Forest Oil shares, which have more than halved in the past
year, were marginally down at $5.00 on the New York Stock
Exchange on Friday. Schlumberger's stock was down less than 1
percent at $76.48.